Americans are not likely to trust BP and any explanation it has for the oil spill and accident in the Gulf of Mexico, which threatens to become a huge disaster.
The world’s third biggest private oil group has an unfortunate history of fatal mishaps in the US. In fact this will be third time unlucky in just six years for the giant.
While BP was the client and the drilling was being done on its behalf (and Reuters reported that the company that supplied the blowout preventer to the project’s well is covered by $500 million of insurance coverage), accidents such as this damage the company and cause Americans to wonder about its safety record.
The company has had more deaths than any other US oil refiner since 1995, as this report shows.
The worst was in March 2005 when an explosion at the company’s Texas City refinery killed 15 people and left hundreds injured. That produced a final report that laid the blame squarely at lax management at all levels of BP. BP was fined tens of millions of dollars and paid a reported $US2 billion to settle civil law suits over the disaster.
Then there was the 2006 oil spill that forced BP to shut production at its north-west slope oil fields at Prudhoe Bay in Alaska. That cost tens of millions of dollars after more than 65,000 litres of oil flowed from a leak in a distribution pipe, for which BP was fined $US20 million.
The latest spill is massive: the oil flowing from a ruptured deep-water well in the Gulf of Mexico is due to come ashore along the coasts of Louisiana, Mississippi, Alabama and Florida. According to a report on Bloomberg, the cost could be $US1.5 billion to the global insurance industry.
The first oil is likely to hit the Mississippi Delta region sometime later tonight, our time.
BP is the company that is going to have to foot the cost to start, including that from the US and the four state governments. President Obama is talking about using the military to try and control it. BP set part of the slick on fire, to no avail.
The spill could be as big as the Exxon Valdez in Alaska in the 1980s, during which 260,000 barrels of oil spilled into Arctic waters. BP originally thought the latest spill was 1000 barrels a day, but now it has been revised to a massive 5000 barrels a day. The well is in 1600 metres of water.
The drilling rig caught fire and floated for two days before sinking. That broke the riser pipe that connects the the rig to the well. The pipe fell to the sea floor. Oil is now said to be coming from the pipe and two other locations.
The spill also has the capacity to derail plans by Obama to open offshore waters in the US to drilling, with coastal areas of Virginia slated to be the first. That is part of a complex deal to try and get a climate change Bill through the US Congress.
BP shares fell 7% overnight and have lost more than 11% since the spill started on April 20.